Question
Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one outflow followed by a series of
Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows.
| a. | The IRR calculation implicitly assumes that cash flows are withdrawn from the business rather than being reinvested in the business. | |
| b. | If Project A has a higher IRR than Project B, then Project A must also have a higher NPV. | |
| c. | If Project A has a higher IRR than Project B, then Project A must have the lower NPV. | |
| d. | If a project has normal cash flows and its IRR exceeds its WACC, then the project's NPV must be positive. | |
| e. | The IRR calculation implicitly assumes that all cash flows are reinvested at the WACC. |
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Personal Finance
Authors: Jeff Madura, Hardeep Singh Gill
4th Canadian edition
134724712, 134724713, 9780134779782 , 978-0134724713
